Should-Read: Ramesh Ponnuru and David Beckworth: Federal Reserve’s Monetary Policy & Economic Reaction

Should-Read: But where in the Republican coalition is there a faction that wants to learn from history? If they learned from monetary history, they would presumably have to learn from other kinds of history as well. And would that not require that they learn inconvenient things?: Ramesh Ponnuru and David Beckworth: Federal Reserve’s Monetary Policy & Economic Reaction: “In practice, the Fed’s current inflation target is asymmetric: The Fed is less concerned about undershooting it than overshooting it…

…A commitment to stabilize spending growth should in contrast be symmetric. Achieving symmetry would require an abandonment of the Fed’s current policy of paying banks more for holding excess reserves than they could earn from lending and buying Treasuries…. The Fed is unlikely to take any of these steps, however, unless it first jettisons the conventional wisdom about our allegedly hyperstimulative policies over the last decade. It should get our recent history right, lest it condemn us to repeat it…